The JANA deal: we’ll find out how it works soon enough

July 23, 2017

Jim Lamborn: JANA chief

For John Coombe and Ken Marshman, at least, and John Nolan as an interested observer, JANA has come full circle. After weeks of rumours, NAB confirmed last week that it would be selling to staff 55 per cent of the equity in JANA Investment Advisers, which it had bought from founder Nolan, and early colleagues Coombe and Marshman, in 2000.

JANA has also established a presence in NZ including consultancy deals with NAB-subsidiary, BNZ KiwiSaver scheme, and the $340 million Trust Waikato.

The announcement, though, leaves more questions than it provides answers.

Those questions, to do with the implementation of the partial separation of two subsidiaries which NAB has sought to better integrate in recent years – JANA and MLC – will probably have to wait until finalisation in about three months to be answered.

They range from the small-but important question of office accommodation to whether the Plum corporate superannuation platform will continue to offer both JANA implemented consulting strategies and MLC Investments implemented options. MLC has been doing the actual implementation of JANA’s implemented strategies, too, while JANA has continued to provide the intellectual grunt for the two entities since they were brought together in 2014.

Plum funds were consolidated under the umbrella of the MLC Superannuation Fund, totalling $70 billion, last year. Matthew Lawrance was appointed its head. Interestingly, Plum started as a joint venture between NAB and Vanguard Investments. Vanguard has maintained some prime spots on the Plum investment options roster even after NAB took 100 per cent ownership – which has probably been good for both parties.

But we’re probably nit-picking over the JANA deal. It is undoubtedly good for staff and clients and, therefore, the whole industry. Asset consultants have been a crucial part of the development of Australian super funds into the world leaders that they are. The new-look JANA will sort it out.

Garry Mulcahy, the executive general manager of NAB Asset Management, said his division – under which JANA had uncomfortably sat – looked forward to “partnering with JANA to leverage our complementary capabilities in providing investment advice and portfolio management solutions to our diverse clients”.

Jim Lamborn, the JANA chief executive, said the new structure would allow for greater economic alignment between clients and employees.

“It will also ensure that we can continue to have the best talent so that we can continue to provide leading research and investment insights,” he said. And therein lies the rub. About 25 staff will become shareholders when the deal is finalised.

Lamborn has been with JANA for about 15 years, taking on the chief executive role in 2015 after former chief executive Ian Patrick left to become CIO of Sunsuper. Top-notch asset consultants leaving to join either funds or fund managers has become a major concern for the asset consulting fraternity in recent years. All the majors – Frontier, Mercer, Willis Towers Watson as well as JANA – have suffered from the brain drain. Russell Investments no longer refers to itself as an asset consultant in Australia.

Ken Marshman, the JANA chair and a former chief executive of John A. Nolan & Associates prior to and after the sale to NAB, and John Coombe, Sydney-based executive director who joined the firm just a year after its formation by John Nolan in 1987, are remaining in their current roles. Nolan, Marshman and Coombe are all alumni of the State Electricity Commission of Victoria. Lamborn, too, spent 15 years in finance side of the electricity industry before joining JANA.

John Nolan once said that he was proud of the fact that after he sold John A. Nolan & Associates to concentrate on his funds management business, Warakirri Asset Management, that both JANA and Warakirri grew their businesses through increased funds under advice or management. That’s a compliment to both the JANA staff and also to NAB. Banks have had a history in meddling with their acquisitions to the point that they lose value.